PART I. FINANCIAL INFORMATION This section presents the unaudited consolidated financial information for Myseum, Inc. and its subsidiaries [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Myseum, Inc. and its subsidiaries, including balance sheets, statements of operations and comprehensive loss, statements of changes in stockholders' equity, and statements of cash flows for the periods ended June 30, 2025 and 2024 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (Unaudited) ($) | December 31, 2024 ($) | | :-------------------------------- | :-------------------------- | :------------------ | | **ASSETS** | | | | Cash and cash equivalents | $407,888 | $1,196,699 | | Short-term investments, at fair value | $5,306,701 | $2,952,512 | | Total Current Assets | $5,787,155 | $4,288,022 | | Capitalized internal-use software, net | $1,224,641 | $1,050,000 | | Total Assets | $7,449,501 | $5,371,458 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total Current Liabilities | $644,258 | $630,311 | | Total Liabilities | $838,987 | $630,311 | | Total Stockholders' Equity | $6,610,514 | $4,741,147 | | Total Liabilities and Stockholders' Equity | $7,449,501 | $5,371,458 | [Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement details the company's revenues, expenses, and net loss for the three and six months ended June 30, 2025 and 2024 | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Revenues | $78 | $151 | $161 | $282 | | Total operating expenses | $1,406,906 | $1,267,254 | $3,067,435 | $2,930,804 | | Loss from Operations | $(1,406,828) | $(1,267,103) | $(3,067,274) | $(2,930,522) | | Net Loss | $(1,357,189) | $(1,204,108) | $(2,976,299) | $(2,765,915) | | Net Loss Attributable to Common Shareholders | $(1,216,872) | $(983,247) | $(2,690,068) | $(2,121,059) | | Basic and Diluted EPS | $(0.29) | $(0.33) | $(0.65) | $(0.73) | - Net revenues decreased significantly for both the three-month period (**48.3%** YoY) and six-month period (**42.9%** YoY) ended June 30, 2025, indicating a substantial decline in subscription revenue[15](index=15&type=chunk) - Total operating expenses increased by **11.0%** for the three months and **4.7%** for the six months ended June 30, 2025, contributing to a larger operating loss[15](index=15&type=chunk) - Net loss attributable to common shareholders increased by **23.8%** for the three months and **26.8%** for the six months ended June 30, 2025, despite a slight improvement in basic and diluted EPS due to a higher weighted average number of common shares outstanding[15](index=15&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This statement outlines the changes in the company's equity components, including additional paid-in capital and accumulated deficit, for the period ended June 30, 2025 | Metric | December 31, 2024 ($) | June 30, 2025 ($) | | :-------------------------------- | :------------------ | :------------ | | Total Stockholders' Equity | $4,741,147 | $6,610,514 | | Additional Paid-in Capital | $59,649,645 | $64,676,721 | | Accumulated Deficit | $(52,373,248) | $(55,063,316) | | Noncontrolling Interest | $(2,137,789) | $(2,605,550) | - Total stockholders' equity increased from **$4.74 million** at December 31, 2024, to **$6.61 million** at June 30, 2025, primarily driven by an increase in additional paid-in capital from common stock issuance[17](index=17&type=chunk) - The accumulated deficit continued to grow, reaching **$(55,063,316)** by June 30, 2025, reflecting ongoing net losses[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement reports the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Used in Operating Activities | $(2,610,978) | $(2,550,384) | | Net Cash Provided by (Used in) Investing Activities | $(2,533,305) | $527,769 | | Net Cash Provided by Financing Activities | $4,355,472 | $1,656,771 | | Net Decrease in Cash and Cash Equivalents | $(788,811) | $(365,844) | | Cash and Cash Equivalents - end of period | $407,888 | $587,518 | - Net cash used in operating activities increased slightly to **$(2,610,978)** for the six months ended June 30, 2025, compared to **$(2,550,384)** in the prior year[21](index=21&type=chunk) - Investing activities shifted from providing **$527,769** in cash in 2024 to using **$(2,533,305)** in 2025, primarily due to increased purchases of short-term investments and capitalization of internal-use software[21](index=21&type=chunk) - Financing activities provided significantly more cash in 2025 (**$4,355,472**) compared to 2024 (**$1,656,771**), mainly from the sale of common stock[21](index=21&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's organization, significant accounting policies, and specific financial statement line items [NOTE 1 – Organization and Business Overview](index=12&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES%20%28Organization%29) This note describes Myseum, Inc.'s corporate history, business segments, and recent strategic acquisitions and divestitures - Myseum, Inc. (formerly Dat Chat, Inc.) was incorporated in Nevada on December 4, 2014, and changed its name to Myseum, Inc. on August 7, 2025[23](index=23&type=chunk) - The company operates in cybersecurity and social media, focusing on privacy protection with its flagship product, DatChat Messenger & Private Social Network[23](index=23&type=chunk) - Myseum has expanded into developing 'Myseum,' a social network and multi-media storage platform, and acquired RPM Interactive, Inc. in October 2024, shifting its subsidiary's focus to AI-generated publishing for gaming apps and podcasts[23](index=23&type=chunk)[29](index=29&type=chunk) - RPM Interactive, a majority-owned subsidiary, underwent several name changes and ownership adjustments, including VR Interactive LLC (a related party) becoming a **25%** non-controlling interest[24](index=24&type=chunk)[26](index=26&type=chunk) - The company deconsolidated Metabizz, LLC and Metabizz SAS on March 31, 2024, ceasing business with them and directly paying technology professionals[27](index=27&type=chunk) - On August 27, 2024, Myseum acquired RenAI Software and domain names from Judaopta LLC in exchange for **8,000,000** restricted shares of RPM Interactive common stock[28](index=28&type=chunk) [NOTE 2 – Summary of Significant Accounting Policies](index=13&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the accounting principles and methods used in preparing the financial statements, including consolidation, revenue recognition, and cash flow presentation - The financial statements are prepared in accordance with U.S. GAAP for interim financial information, with certain information condensed or omitted as permitted[31](index=31&type=chunk)[32](index=32&type=chunk) - The Company consolidates wholly-owned and majority-owned subsidiaries, and Variable Interest Entities (VIEs) where it is the primary beneficiary, including Myseum, Inc., DatChat Patents II, LLC, and RPM Interactive (as a VIE after August 27, 2024)[33](index=33&type=chunk) - Metabizz, LLC and Metabizz SAS were deconsolidated on March 31, 2024, resulting in a gain on deconsolidation of **$107** for the six months ended June 30, 2024[34](index=34&type=chunk)[40](index=40&type=chunk) - Noncontrolling interests are treated as a separate component of equity, with losses allocated to them even if resulting in a deficit balance. As of June 30, 2025, the aggregate noncontrolling interest deficit amounted to **$2,605,550**[35](index=35&type=chunk)[37](index=37&type=chunk) - RPM Interactive was determined to be a VIE as of August 27, 2024, with Myseum retaining approximately **34.0%** ownership as of June 30, 2025, and consolidating its assets and liabilities[41](index=41&type=chunk) - The Company had cash and cash equivalents of **$407,888** and working capital of **$5.14 million** as of June 30, 2025, and believes these resources, along with recent financing, will be sufficient for the next twelve months[43](index=43&type=chunk)[174](index=174&type=chunk) - Revenue is recognized from subscription fees for the messaging application, with lifetime subscriptions recognized over an estimated useful life of **12** months[60](index=60&type=chunk) Research and Development Expenses | Period | 2025 ($) | 2024 ($) | | :-------------------- | :----- | :----- | | Three Months Ended June 30 | $5,000 | $226,058 | | Six Months Ended June 30 | $11,000 | $459,976 | - Research and development expenses decreased significantly by **97.8%** for the three months and **97.6%** for the six months ended June 30, 2025, as the company ceased development of its Metaverse software[61](index=61&type=chunk)[166](index=166&type=chunk) - The Company adopted ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, effective for fiscal years beginning after December 15, 2026, but does not expect a material impact[75](index=75&type=chunk) [NOTE 3 – Short-Term Investments](index=20&type=section&id=NOTE%203%20%E2%80%93%20SHORT-TERM%20INVESTMENTS) This note provides information on the company's short-term investments, primarily U.S. Treasury zero coupon bills, and their fair value classification | Investment Type | June 30, 2025 Fair Value ($) | December 31, 2024 Fair Value ($) | | :------------------------ | :------------------------- | :--------------------------- | | US Treasury zero coupon bills | $5,306,701 | $2,952,512 | | Total short-term investments | $5,306,701 | $2,952,512 | - Short-term investments, consisting solely of highly rated U.S. Treasury zero coupon bills, increased by **79.7%** from **$2.95 million** at December 31, 2024, to **$5.31 million** at June 30, 2025[78](index=78&type=chunk) - These investments mature between August 2025 to February 2026 and are classified as available-for-sale, recorded at fair value (Level 1 measurements)[49](index=49&type=chunk)[51](index=51&type=chunk)[78](index=78&type=chunk) [NOTE 4 – Property and Equipment](index=20&type=section&id=NOTE%204%20%E2%80%93%20PROPERTY%20AND%20EQUIPMENT) This note details the composition and net book value of the company's property and equipment, along with depreciation expenses | Category | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------- | :------------ | :------------------ | | Furniture and fixture | $56,575 | $56,575 | | Computer equipment | $44,065 | $39,590 | | Leasehold improvements | $4,350 | $4,350 | | Less: accumulated depreciation | $(78,288) | $(67,079) | | Net Property and Equipment | $26,702 | $33,436 | - Net property and equipment decreased by **20.1%** from **$33,436** at December 31, 2024, to **$26,702** at June 30, 2025[79](index=79&type=chunk) - Depreciation expense for the three months ended June 30, 2025, was **$5,568** (vs. **$5,782** in 2024), and for the six months was **$11,209** (vs. **$11,565** in 2024)[79](index=79&type=chunk) [NOTE 5 – Internal-Use Software](index=20&type=section&id=NOTE%205%20%E2%80%93%20INTERNAL-USE%20SOFTWARE) This note describes the capitalization of internal-use software development costs and the acquisition of RPM Florida's software assets | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------- | :------------ | :------------------ | | Internal-use software, net | $1,224,641 | $1,050,000 | - Net internal-use software increased by **16.6%** from **$1.05 million** at December 31, 2024, to **$1.22 million** at June 30, 2025[80](index=80&type=chunk) - During the six months ended June 30, 2025, the Company capitalized **$174,641** in software development costs as projects were in the application development stage[82](index=82&type=chunk) - On October 29, 2024, RPM Interactive acquired **100%** of RPM Florida's shares for **$1.05 million**, which was treated as an asset acquisition (internal-use software) as RPM Florida had no operations or employees[80](index=80&type=chunk) - No amortization of intangible assets was recorded for the three and six months ended June 30, 2025, as the internal-use software has not yet been placed in service[82](index=82&type=chunk) [NOTE 6 – Operating Lease Right-of-Use Assets and Operating Lease Liabilities](index=21&type=section&id=NOTE%206%20%E2%80%93%20OPERATING%20LEASE%20RIGHT-OF-USE%20ASSETS%20AND%20OPERATING%20LEASE%20LIABILITIES) This note outlines the company's operating lease arrangements, including right-of-use assets, lease liabilities, and related rent expenses - On April 24, 2025, the Company amended its facility lease, relocating and reducing square footage, resulting in new right-of-use assets and operating lease liabilities of **$244,793**[83](index=83&type=chunk)[84](index=84&type=chunk) - The new lease term commenced May 1, 2025, and expires May 31, 2029, with a monthly base rent of **$6,417**, subject to annual **3%** increases[83](index=83&type=chunk) | Metric | June 30, 2025 ($) | | :-------------------------------- | :------------ | | Right-of-use asset, net | $234,475 | | Total operating lease liability | $241,231 | | Current portion of lease liability | $46,502 | | Long term portion of lease liability | $194,729 | - Rent expense for the six months ended June 30, 2025, was **$48,023**, an increase from **$45,447** in 2024[83](index=83&type=chunk) [NOTE 7 – Related Party Transactions](index=23&type=section&id=NOTE%207%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions and relationships with related parties, including executive compensation and ownership interests in subsidiaries - The wife of Myseum's CEO, Darin Myman, was employed as an executive secretary, earning **$36,000** for the six months ended June 30, 2025 and 2024[88](index=88&type=chunk) - VR Interactive LLC, **45%** owned by Darin Myman and **3.75%** by Peter Shelus (CTO/Director), purchased **8,000,000** shares of RPM Interactive from Metabizz shareholders for **$120,000** on January 10, 2024, making VR Interactive a **25%** non-controlling interest in RPM Interactive[89](index=89&type=chunk) [NOTE 8 – Stockholders' Equity](index=23&type=section&id=NOTE%208%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) This note details the company's capital structure, including authorized shares, equity incentive plans, common stock offerings, and stock-based compensation - The authorized capital stock consists of **200,000,000** shares, with **180,000,000** common shares and **20,000,000** preferred shares[90](index=90&type=chunk) - The 2021 Omnibus Equity Incentive Plan was amended on August 6, 2025, to increase reserved shares to **1,000,000** from **600,000**[91](index=91&type=chunk) - Series A Preferred Stock has no shares outstanding. Series B Preferred Stock (**2,000,000** shares issued for **$1,000**) carries **10** votes per share for specific matters (Authorized Stock Increase) and is redeemable for **$10**[92](index=92&type=chunk)[93](index=93&type=chunk)[95](index=95&type=chunk)[97](index=97&type=chunk) - In January 2025, the Company completed an offering of **1,200,000** common shares at **$4.25** per share, generating net proceeds of **$4.53 million**, and issued warrants to the placement agent for **60,000** shares[105](index=105&type=chunk) - The Company entered into an Equity Sales Agreement with Benchmark to sell up to **$6 million** of common shares through an 'at the market offering' program, with a commission rate of **4.0%** (reducible to **3%** for sales over **$1 million**)[106](index=106&type=chunk)[107](index=107&type=chunk) - The 2023 Stock Repurchase Program authorized up to **$2 million** in common stock repurchases; **66,945** shares were purchased for **$397,969** in 2023, with no further repurchases in the six months ended June 30, 2025 or 2024[109](index=109&type=chunk) - Stock options granted in 2025 included **260,000** options on January 14 (exercise price **$5.50**) and **65,000** options on June 8 (exercise price **$4.00**), valued using a Black-Scholes model[114](index=114&type=chunk)[115](index=115&type=chunk) Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Number of Options | Weighted Average Exercise Price ($) | | :------------------------------------ | :---------------- | :------------------------------ | | Balance on December 31, 2024 | 114,570 | $126.92 | | Granted | 325,000 | $5.20 | | Cancelled | (12,750) | $(34.07) | | Balance on June 30, 2025 | 426,820 | $36.94 | | Options exercisable on June 30, 2025 | 106,820 | $132.06 | | Weighted average fair value of options granted | - | $4.30 | - Stock-based compensation expense related to stock options amounted to **$313,666** for the six months ended June 30, 2025, with **$1.07 million** remaining to be expensed over future vesting periods[118](index=118&type=chunk) Common Stock Warrants Activity (Six Months Ended June 30, 2025) | Metric | Number of Warrants | Weighted Average Exercise Price ($) | | :------------------------------------ | :----------------- | :------------------------------ | | Balance on December 31, 2024 | 67,385 | $49.80 | | Granted | 60,000 | $4.25 | | Balance on June 30, 2025 | 127,385 | $28.35 | | Warrants exercisable on June 30, 2025 | 127,385 | $28.35 | [NOTE 9 – Commitments and Contingencies](index=29&type=section&id=NOTE%209%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note describes the company's contractual commitments, including executive employment agreements and the Ambassador Program - Myseum's CEO, Darin Myman, has an employment agreement with an annual base salary of **$450,000** and a potential annual bonus of up to **$350,000**. He received a bonus of **$350,000** in 2025 and **$300,000** in 2024[124](index=124&type=chunk)[125](index=125&type=chunk) - RPM Interactive entered into employment agreements with Michael Mathews (CEO), W. David Linsley (CFO), and Daniel Warren (CTO), effective upon its IPO, with annual base salaries of **$300,000**, **$60,000**, and **$250,000**, respectively, plus potential bonuses and severance provisions[126](index=126&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) - The Company initiated an 'Ambassador Program' to reward early investors, with a maximum estimated total potential distribution of **$86,246**. As of June 30, 2025, **$9,817** was recorded as settlement expense, and **$21,722** was paid, with an accrued balance of **$64,523**[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results for the three and six months ended June 30, 2025 and 2024 [Overview](index=31&type=section&id=Overview) This section provides a general business description of Myseum, Inc., its core products, and strategic shifts in its subsidiaries - Myseum, Inc. is a private messaging, cybersecurity, and social media company, with its flagship product being DatChat Messenger & Private Social Network, focusing on user privacy and control over shared information[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - The company launched the Myseum social media platform, an AI-backed digital content management and storage solution for creating digital legacies[139](index=139&type=chunk) - Following the acquisition of RPM Interactive in October 2024, the subsidiary shifted its focus from the Habytat platform to developing AI-driven podcast and gaming technologies[135](index=135&type=chunk)[140](index=140&type=chunk)[142](index=142&type=chunk) [Recent Events](index=32&type=section&id=Recent%20Events) This section highlights significant corporate actions, including changes in subsidiary ownership and recent common stock offerings - In January 2025, Myseum returned **3,500,000** shares of RPM Interactive common stock, which were cancelled, resulting in Myseum holding approximately **34%** of RPM Interactive's outstanding shares[141](index=141&type=chunk)[143](index=143&type=chunk) - In January 2025, the company completed an offering of **1,200,000** common shares at **$4.25** per share, raising approximately **$5.1 million** in gross proceeds, and issued warrants to the placement agent for **60,000** shares[144](index=144&type=chunk) [Critical Estimates](index=33&type=section&id=Critical%20Estimates) This section discusses key accounting estimates and judgments that significantly impact the financial statements, such as asset valuations and stock-based compensation - Critical estimates include assumptions for impairment of long-term assets, valuation of intangible assets, digital currencies, lease liabilities, short-term investments, deferred tax assets, fair value of VIE assets/liabilities, allocation of corporate expenses, and fair value of non-cash equity transactions[44](index=44&type=chunk) - The company capitalizes internal-use software costs during the application development stage, with **$174,641** capitalized in the six months ended June 30, 2025, compared to expensing such costs in the prior year due to projects being in the preliminary stage[147](index=147&type=chunk) - Noncontrolling interests are accounted for as a separate component of equity, with losses allocated to them even if resulting in a deficit balance. The aggregate noncontrolling interest deficit was **$2,605,550** as of June 30, 2025[148](index=148&type=chunk)[150](index=150&type=chunk) - RPM Interactive was determined to be a Variable Interest Entity (VIE) as of August 27, 2024, due to Myseum's power to direct its activities and absorb significant losses/benefits, leading to consolidation[154](index=154&type=chunk) - Stock-based compensation is estimated using the Black-Scholes-Merton option-pricing model, with assumptions for fair market value, expected life, volatility, and risk-free interest rate, which involve inherent uncertainties[155](index=155&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's net revenues, operating expenses, and net loss for the periods presented Net Revenues | Period | June 30, 2025 ($) | June 30, 2024 ($) | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | | Three Months Ended | $78 | $151 | -48.3% | | Six Months Ended | $161 | $282 | -42.9% | Operating Expenses | Expense Category | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | Change (%) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Compensation and related expenses | $679,107 | $522,596 | 29.9% | $1,646,387 | $1,420,260 | 15.9% | | Marketing and advertising expenses | $72,241 | $32,883 | 119.7% | $110,503 | $67,600 | 63.5% | | Professional and consulting expenses | $410,896 | $250,274 | 64.2% | $866,380 | $503,899 | 71.9% | | Research and development | $5,000 | $226,058 | -97.8% | $11,000 | $459,976 | -97.6% | | General and administrative expenses | $239,662 | $235,443 | 1.8% | $433,165 | $479,069 | -9.6% | | Total Operating Expenses | $1,406,906 | $1,267,254 | 11.0% | $3,067,435 | $2,930,804 | 4.7% | - The significant decrease in research and development expenses (**97.8%** for three months, **97.6%** for six months) was due to ceasing development of Metaverse software[166](index=166&type=chunk) - Marketing and advertising expenses increased substantially (**119.7%** for three months, **63.5%** for six months) due to increased promotions, branding, and digital marketing strategies[163](index=163&type=chunk) - Professional and consulting expenses rose significantly (**64.2%** for three months, **71.9%** for six months), driven by increases in investor relations, accounting, legal, and Edgar agent fees[164](index=164&type=chunk)[165](index=165&type=chunk) Net Loss and EPS | Metric | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | Change (%) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | Change (%) | | :------------------------------------ | :----------------------------- | :----------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Net Loss | $(1,357,189) | $(1,204,108) | 12.7% | $(2,976,299) | $(2,765,915) | 7.6% | | Net Loss Attributable to Common Shareholders | $(1,216,872) | $(983,247) | 23.8% | $(2,690,068) | $(2,121,059) | 26.8% | | Basic and Diluted EPS | $(0.29) | $(0.33) | -12.1% | $(0.65) | $(0.73) | -10.9% | [Liquidity, Capital Resources and Plan of Operations](index=37&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Plan%20of%20Operations) This section assesses the company's current cash position, capital resources, and future plans to meet its operational and financial obligations - As of June 30, 2025, the company had cash and cash equivalents of **$407,888**, short-term investments of **$5.31 million**, and working capital of **$5.14 million**[174](index=174&type=chunk) - Net cash used in operating activities was **$2,610,978** for the six months ended June 30, 2025[174](index=174&type=chunk)[176](index=176&type=chunk) - The company expects to continue generating operating losses due to corporate overhead, R&D, and public company costs, but believes existing working capital and cash from the January 2025 offering (**$4.53 million** net proceeds) will cover operating needs for the next twelve months[174](index=174&type=chunk) Cash Flow Activities (Six Months Ended June 30) | Cash Flow Activity | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :------- | | Operating Activities | $(2,610,978) | $(2,550,384) | $(60,594) | | Investing Activities | $(2,533,305) | $527,769 | $(3,061,074) | | Financing Activities | $4,355,472 | $1,656,771 | $2,698,701 | - Investing activities shifted from providing cash in 2024 to using a significant amount in 2025, primarily due to increased purchases of short-term investments and capitalization of internal-use software[179](index=179&type=chunk) - Financing activities provided substantially more cash in 2025, mainly from the sale of common stock, offsetting the cash used in operating and investing activities[181](index=181&type=chunk) [Off-Balance Sheet Arrangements](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any material off-balance sheet arrangements that could impact the company's financial condition - The company has not entered into any financial guarantees, commitments to guarantee third-party payment obligations, derivative contracts indexed to shares, or retained/contingent interests in assets transferred to unconsolidated entities[184](index=184&type=chunk) [JOBS Act](index=39&type=section&id=JOBS%20Act) This section explains the company's status as an 'emerging growth company' under the JOBS Act and its election to use extended accounting transition periods - As an 'emerging growth company' under the JOBS Act, Myseum has elected to use extended transition periods for complying with new or revised accounting standards, which may make its financial statements not comparable to other public companies[186](index=186&type=chunk) - The company intends to rely on exemptions including not providing an auditor's attestation report on internal controls over financial reporting and not complying with mandatory audit firm rotation[187](index=187&type=chunk) - Myseum will remain an 'emerging growth company' until the earliest of reaching **$1.235 billion** in annual gross revenues, December 31, 2024 (fifth anniversary of IPO), issuing over **$1 billion** in nonconvertible debt, or becoming a large accelerated filer[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Myseum, Inc. is not required to provide quantitative and qualitative disclosures about market risk - Myseum, Inc. is a 'smaller reporting company' and is therefore not required to provide quantitative and qualitative disclosures about market risk[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the company's disclosure controls and procedures and internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=39&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to limited resources - Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, primarily due to limited resources and a small number of employees[189](index=189&type=chunk) [Management's Report on Internal Control Over Financial Reporting](index=40&type=section&id=Management%27s%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) This report identifies material weaknesses in internal control over financial reporting and outlines management's remediation plans - Material weaknesses in internal control over financial reporting include a lack of segregation of duties within accounting functions, insufficient multiple levels of management review on complex issues, and inadequate system and manual controls[195](index=195&type=chunk) - Management is committed to remediating these weaknesses by potentially hiring additional accounting/finance personnel and establishing disbursement review/approval processes[191](index=191&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[192](index=192&type=chunk) PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently aware of any legal proceedings or claims that would have a material adverse effect on its business, financial condition, or operating results - The company is not currently aware of any legal proceedings or claims that would individually or in aggregate have a material adverse effect on its business, financial condition, or operating results[197](index=197&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes have occurred in the company's risk factors from those previously disclosed in its Annual Report on Form 10-K filed on March 31, 2025[198](index=198&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no recent sales of unregistered equity securities and no common stock repurchases during the quarter ended June 30, 2025 - There were no recent sales of unregistered securities[199](index=199&type=chunk) - The company did not repurchase any common stock during the quarterly period ended June 30, 2025[200](index=200&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - There were no defaults upon senior securities[201](index=201&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[202](index=202&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading plans were adopted or terminated by directors or executive officers during the fiscal quarter ended June 30, 2025 - None of the company's directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the fiscal quarter ended June 30, 2025[203](index=203&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, equity incentive plans, certifications, and XBRL data files - Exhibits include the Certificate of Amendment to Amended and Restated Articles of Incorporation (Exhibit 3.1) and the Amended and Restated 2021 Omnibus Equity Incentive Plan (Exhibit 10.1)[204](index=204&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial and Accounting Officer (Exhibits 31.1, 31.2, 32.1, 32.2) are filed or furnished[204](index=204&type=chunk) - Inline XBRL Instance Document and Taxonomy Extension Documents (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE) are included[204](index=204&type=chunk) [Signatures](index=43&type=section&id=Signatures) This section provides the official signatures of the company's principal executive and financial officers, certifying the report's contents - The report is signed by Darin Myman, Chief Executive Officer and Director (Principal Executive Officer), and Brett Blumberg, Chief Financial Officer (Principal Financial and Accounting Officer), on August 14, 2025[208](index=208&type=chunk)

Corporate Rebranding - DatChat, Inc. has announced a rebranding to Myseum, Inc., with new trading symbols "MYSE" for common stock and "MYSEW" for Series A warrants effective August 11, 2025 [1][2] - The rebranding aligns with the company's strategic focus on the Myseum social media platform, which emphasizes privacy and security in digital content management [2][3] Myseum Platform Features - Myseum is a multi-tiered social media platform launched in March 2025, designed for secure and private sharing and storage of digital content [3][7] - The platform allows users to create a digital legacy by storing and sharing messages, photos, videos, and documents within a protected digital family library [3][7] - An upcoming upgrade to the Myseum platform will introduce advanced features aimed at enhancing the user experience for sharing photos and videos [4][5] Technology and User Experience - Myseum's technology includes proprietary electronic content management and sharing capabilities, making it easier for users to save and organize private media [5][6] - The platform offers 50 GB of free storage, with additional storage available for a one-time fee of $29.95 per 50 GB [6] - Myseum is available on both iOS and Android, with a desktop version planned for later in the year [6] DatChat Messenger - The company continues to operate the DatChat Messenger, which features privacy controls such as message lifespan management, screenshot prevention, and encrypted photo storage [8] - This messaging platform allows users to maintain control over their messages, including the ability to delete messages or entire threads [8]

Core Insights - DatChat Inc. has selected Otter PR as its public relations agency to enhance its communications efforts [1][2] - The partnership aims to promote DatChat's innovative approach to social networking and digital privacy [2] Company Overview - DatChat Inc. (Nasdaq: DATS) specializes in secure messaging and social media, focusing on user privacy both on personal devices and after information is shared [4] - The DatChat Messenger allows users to control message visibility duration, prevent screenshots, and manage encrypted photos, providing a secure messaging experience [4] - The Myseum platform serves as a secure digital content storage and sharing ecosystem for families and groups [4] PR Agency Overview - Otter PR is recognized as a leading PR agency, having received accolades from Clutch, G2, and UpCity for its media placement success [1][5] - The agency aims to transform brands into household names and has been featured in major publications like Yahoo Finance and Forbes [5]

Core Points - DatChat, Inc. has been granted Canadian Patent No. 3,149,004 for "Systems And Methods Of Transforming Electronic Content," enhancing its global intellectual property portfolio [1][2] - The company is preparing for the worldwide release of its Myseum platform this fall, which will feature advanced functionalities for sharing photos and videos [1] - DatChat's Myseum platform offers 50 GB of free timeless storage and allows users to create encrypted galleries and personalized newsfeeds [4] Intellectual Property - DatChat's technology is already patented in key markets, including the United States, and has received Notices of Allowance from the Mexican and European Patent Offices [2] - The company's intellectual property portfolio now consists of 17 issued patents, 1 Notice of Allowance, and several filed international patent applications [2] Product Features - DatChat Messenger provides users with control over message visibility duration, screenshot prevention, and encrypted photo storage [3] - Myseum is designed as a digital shoebox social network, enabling users to share and manage digital content securely for current and future generations [4]

Core Viewpoint - DatChat, Inc. currently owns 34% of RPM Interactive, which has filed for an initial public offering (IPO) with the SEC [1] Group 1: DatChat Overview - DatChat, Inc. is a secure messaging and social media company focused on user privacy and information protection [4] - The company offers a messaging platform that allows users to control the visibility duration of their messages and prevents screenshots [4] - DatChat's Myseum is a digital storage and social network platform that provides 50 GB of free storage and allows users to create encrypted galleries and collections [5] Group 2: RPM Interactive Overview - RPM Interactive is an AI-generated publishing and software company developing an automated platform called Catch-Up for creating short-form video content [6] - The platform aims to simplify content creation for various users, from individual creators to major media brands, across diverse topics [6] Group 3: IPO Details - RPM Interactive has filed a registration statement on Form S-1 for a proposed IPO, with the number of shares and price range yet to be determined [1] - The company has applied to list its common stock on the Nasdaq Capital Market under the ticker symbol "RPMI" [1] - The Benchmark Company, LLC will act as the sole book-running manager for the proposed offering [2]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q1 2025 consolidated financial statements show total assets increased to $8.5 million, net loss widened to $1.62 million, and financing activities provided $4.38 million [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $8.51 million, driven by cash and short-term investments, with stockholders' equity growing to $7.81 million Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Total Current Assets** | $7,205,507 | $4,288,022 | | Cash and cash equivalents | $1,265,478 | $1,196,699 | | Short-term investments | $5,785,219 | $2,952,512 | | **Total Assets** | **$8,508,527** | **$5,371,458** | | **Total Liabilities** | **$699,436** | **$630,311** | | **Total Stockholders' Equity** | **$7,809,091** | **$4,741,147** | [Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2025 saw minimal revenue of $83, stable operating expenses at $1.66 million, and a widened net loss of $1.62 million, though net loss per share improved Q1 2025 vs Q1 2024 Operating Results (Unaudited) | Metric | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | Net Revenues | $83 | $131 | | Total Operating Expenses | $1,660,529 | $1,663,550 | | Loss from Operations | ($1,660,446) | ($1,663,419) | | Net Loss | ($1,619,110) | ($1,561,807) | | Net Loss Attributable to Common Shareholders | ($1,473,196) | ($1,137,812) | | Net Loss Per Common Share (Basic and Diluted) | ($0.36) | ($0.41) | | Weighted Average Shares Outstanding | 4,089,329 | 2,806,185 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 cash flows show $1.41 million used in operations, $2.91 million in investing, and a significant $4.38 million inflow from financing, resulting in a net cash increase Cash Flow Summary for the Three Months Ended March 31 (Unaudited) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($1,405,389) | ($1,477,240) | | Net Cash Used in Investing Activities | ($2,905,332) | ($648,447) | | Net Cash Provided by Financing Activities | $4,379,500 | $1,420,773 | | **Net Increase (Decrease) in Cash** | **$68,779** | **($704,914)** | - The primary source of cash in Q1 2025 was **$4.53 million** in net proceeds from the sale of common stock[20](index=20&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail RPM Interactive's shift to AI-driven media, deconsolidation of Metabizz VIEs, a $4.53 million stock offering in January 2025, and a new 'at the market' offering program - The company deconsolidated its Variable Interest Entities (VIEs), Metabizz LLC and Metabizz SAS, on March 31, 2024, as it ceased doing business with them[26](index=26&type=chunk)[34](index=34&type=chunk)[40](index=40&type=chunk) - In January 2025, the company sold 1,200,000 shares of common stock at $4.25 per share, receiving net proceeds of **$4,532,000**[43](index=43&type=chunk)[102](index=102&type=chunk) - In February 2025, the company entered into an 'at the market offering' agreement to sell up to **$6,000,000** of its common stock[104](index=104&type=chunk)[105](index=105&type=chunk) - Subsequent to the quarter, in April 2025, subsidiary RPM Interactive appointed a new CEO, CFO, and CTO, and the company entered into a new four-year lease for its office premises[127](index=127&type=chunk)[130](index=130&type=chunk)[134](index=134&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic shifts including RPM Interactive's focus on AI-generated content, Q1 2025 stable operating expenses with R&D decreases offset by compensation and professional fees, and sufficient liquidity for the next twelve months - The company has repositioned its majority-owned subsidiary, RPM Interactive, Inc., to focus on becoming an AI-generated publishing company for mobile game apps and podcasts, ceasing development of the Habytat platform[137](index=137&type=chunk)[144](index=144&type=chunk) - Management believes that existing working capital and cash on hand, including proceeds from the January 2025 offering, are sufficient to meet operating needs for the next twelve months[43](index=43&type=chunk)[173](index=173&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q1 2025 operating expenses remained flat at $1.66 million, with a 97.4% decrease in R&D offset by increases in compensation and professional fees, leading to a 3.7% higher net loss Operating Expenses Breakdown (Three Months Ended March 31) | Expense Category | 2025 ($) | 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Compensation and related expenses | $967,280 | $897,664 | 7.8% | | Marketing and advertising expenses | $38,262 | $34,717 | 10.2% | | Professional and consulting expenses | $455,484 | $253,625 | 79.6% | | Research and development | $6,000 | $233,918 | -97.4% | | General and administrative expenses | $193,503 | $243,626 | -20.6% | | **Total Operating Expenses** | **$1,660,529** | **$1,663,550** | **-0.2%** | - The increase in compensation expenses was mainly due to a **$350,000** executive bonus and increased stock-based compensation, partially offset by a reduction in staff[162](index=162&type=chunk) - The sharp decrease in R&D expenses is attributed to the cessation of development on the Metaverse software project[165](index=165&type=chunk) [Liquidity, Capital Resources and Plan of Operations](index=33&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Plan%20of%20Operations) As of March 31, 2025, the company held **$1.27 million** cash and **$5.79 million** short-term investments, with **$6.51 million** working capital, bolstered by a **$4.53 million** stock offering Liquidity Position as of March 31, 2025 | Item | Amount ($) | | :--- | :--- | | Cash and cash equivalents | $1,265,478 | | Short-term investments | $5,785,219 | | Working capital | $6,506,071 | - Net cash used in operating activities decreased to **$1.41 million** in Q1 2025 from **$1.48 million** in Q1 2024[175](index=175&type=chunk) - Net cash provided by financing activities was **$4.38 million** in Q1 2025, primarily from the sale of common stock, compared to **$1.42 million** in Q1 2024[180](index=180&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' the company is exempt from providing quantitative and qualitative disclosures about market risk - As a 'smaller reporting company' as defined in Rule 12b-2 of the Exchange Act, the company is exempt from providing quantitative and qualitative disclosures about market risk[186](index=186&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of March 31, 2025, due to material weaknesses including lack of segregation of duties and inadequate controls, with remediation plans outlined - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2025[187](index=187&type=chunk) - The ineffectiveness was due to identified material weaknesses, including: - Lack of segregation of duties within accounting functions - Lack of multiple levels of management review on complex issues - Inadequate system and manual controls[189](index=189&type=chunk)[192](index=192&type=chunk) - Remediation plans include the possible hiring of additional accounting and finance personnel and establishing better review and approval processes[189](index=189&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no current material legal proceedings or claims that would adversely affect its business or financial condition - The company reports no current material legal proceedings[194](index=194&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) No material changes in risk factors are reported since the last Annual Report on Form 10-K - No material changes in risk factors are reported since the last Annual Report[195](index=195&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or common stock repurchases during the quarter ended March 31, 2025 - There were no unregistered sales of equity securities in the quarter[196](index=196&type=chunk) - The company did not repurchase any of its equity securities during the quarter[197](index=197&type=chunk) [Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans or other trading arrangements during the quarter - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the quarter[200](index=200&type=chunk)

Core Insights - DatChat, Inc. has received a Notice of Allowance for its patent application titled "Systems and Methods of Transforming Electronic Content," which is expected to be formally issued within 90 days [1][2] - The patent will secure the company's intellectual property rights across 39 European countries, enhancing the protection of its DatChat Messenger and Myseum platforms [2] - DatChat's intellectual property portfolio now consists of 15 issued patents, 1 Notice of Allowance, and several filed international patent applications [3] Company Overview - DatChat, Inc. is a secure messaging and social media company focused on user privacy and information protection, allowing users to control message visibility and prevent screenshots [4] - The DatChat Messenger enables users to set message lifespan on recipients' devices and delete messages or threads, ensuring privacy [4] - The Myseum platform serves as a secure digital storage solution for families to share and store messages, photos, videos, and documents [4]

Core Insights - DatChat, Inc. has entered into a strategic relationship agreement with The Photo Managers to enhance its Myseum social media platform, leveraging TPM's network of over 700 professional photo managers [1][2] Group 1: Strategic Collaboration - The collaboration aims to gather insights from experienced professionals in the photo management industry, which will help refine the Myseum platform to better meet user needs [2][3] - Myseum will benefit from expert advisory, introductions to industry leaders, and participation in events such as The Photo Managers Conference 2025 [2][4] Group 2: Myseum Platform Overview - Myseum, launched in March 2025, offers a unique approach to digital media and content management, allowing users to create a digital legacy for sharing today and with future generations [3][7] - The platform is backed by AI technology and proprietary software, enabling secure storage and sharing of digital content like messages, photos, and videos [3][7] - Myseum provides users with 50 GB of free storage, with additional storage available for a one-time fee of $29.95 per 50 GB [6]

[Part I](index=6&type=section&id=Part%20I) [Business](index=6&type=section&id=Item%201.%20Business) DatChat, Inc. is a private messaging, cybersecurity, and social media company focused on user privacy and secure digital content management, while also developing AI-generated mobile game apps and podcasts - The company's core business is a privacy-focused messaging platform, DatChat Messenger, which allows users to delete messages from recipient devices and protects against screenshots[21](index=21&type=chunk)[22](index=22&type=chunk) - DatChat has expanded its business by launching the Myseum social media platform for secure digital content storage and acquiring RPM Interactive, Inc. to enter the AI-generated gaming and podcasting market[20](index=20&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - Following the acquisition of RPM Interactive in October 2024, the company ceased development of its Habytat metaverse platform to refocus resources on AI-driven technologies[20](index=20&type=chunk)[28](index=28&type=chunk) - The company holds **15 issued patents** related to its encryption and digital asset technologies as of March 28, 2024, with these patents set to expire in 2036[41](index=41&type=chunk) - As of March 26, 2025, the company has **10 full-time employees** and utilizes external professionals for various operational tasks[47](index=47&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks due to its limited operating history, lack of revenue, recurring net losses, intense competition, and dependence on third-party platforms - The company has a limited operating history with minimal revenues and significant net losses, reporting a net loss of **$5,025,007 in 2024** and **$8,404,970 in 2023**[51](index=51&type=chunk) - DatChat faces intense competition from large, well-resourced companies such as Apple, Alphabet (Google), Meta (Facebook), and Snap Inc[56](index=56&type=chunk) - The business is heavily reliant on third-party services, including the Apple App Store for distribution and Amazon Web Services (AWS) for its entire computing infrastructure, posing risks from potential disruptions or unfavorable policy changes[57](index=57&type=chunk)[75](index=75&type=chunk) - The company's metaverse strategy through its Habytat platform was unsuccessful, leading to the cessation of its development, highlighting risks associated with investing in new and unproven technologies[98](index=98&type=chunk) - As an "emerging growth company," DatChat is subject to reduced public company reporting requirements, which could make its common stock less attractive to some investors[126](index=126&type=chunk) [Unresolved Staff Comments](index=29&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[142](index=142&type=chunk) [Cybersecurity](index=29&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program, led by the Chief Technology Officer, employs a multi-faceted approach to manage risks and utilizes third-party service providers and external audits - The cybersecurity team, led by the CTO, uses a multi-pronged approach including an enterprise risk management program, security reviews, vulnerability management, and internal 'red team' simulations to manage threats[143](index=143&type=chunk) - The company supplements its internal security with external audits, a bug bounty program, and a vendor risk management program, also engaging third-party cybersecurity consultants and professional service firms[144](index=144&type=chunk)[145](index=145&type=chunk) [Properties](index=30&type=section&id=Item%202.%20Properties) The company's principal executive office lease terminated on December 31, 2024, and it is currently leasing the space on a month-to-month basis - The company's office lease expired on December 31, 2024, and it is now leasing the space on a month-to-month basis[148](index=148&type=chunk) [Legal Proceedings](index=30&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently aware of any legal proceedings or claims that would have a material adverse effect on its business, financial condition, or operating results - The company is not currently a party to any material legal proceedings[149](index=149&type=chunk) [Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[150](index=150&type=chunk) [Part II](index=31&type=section&id=Part%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=31&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock and Series A Warrants are listed on the Nasdaq Capital Market, with 1,439 shareholders of record as of March 26, 2025, and no cash dividends paid or anticipated - Common stock and Series A Warrants are traded on the Nasdaq Capital Market under symbols **DATS** and **DATSW**[152](index=152&type=chunk) - As of March 26, 2025, there were **1,439 shareholders of record**[153](index=153&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future[154](index=154&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal year 2024, DatChat's net loss decreased to $5.0 million from $8.4 million in 2023, primarily due to a 39.9% reduction in operating expenses, with liquidity bolstered by a January 2025 stock offering Fiscal Year 2024 vs. 2023 Financial Performance | Financial Metric | FY 2024 ($) | FY 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 436 | 672 | (236) | (35.1%) | | Total Operating Expenses | 5,281,339 | 8,784,703 | (3,503,364) | (39.9%) | | Loss from Operations | (5,280,903) | (8,784,031) | 3,503,128 | 39.9% | | Net Loss | (5,025,007) | (8,404,970) | 3,379,963 | 40.2% | | Net Loss Attributable to Common Shareholders | (4,239,160) | (8,404,970) | 4,165,810 | 49.6% | | Net Loss Per Share (Basic & Diluted) | (1.43) | (4.14) | 2.71 | 65.5% | - The significant decrease in operating expenses was mainly due to a **$2.44 million (51.3%) reduction in compensation expenses** (from lower stock-based compensation and staff cuts), a **$0.26 million (67.0%) decrease in marketing**, and a **$0.49 million (36.5%) drop in R&D costs** after ceasing development of the Metaverse software[184](index=184&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) - As of December 31, 2024, the company had **$1.2 million in cash and cash equivalents** and **$3.0 million in short-term investments**, with a subsequent stock offering in January 2025 raising net proceeds of **$4.5 million**, which management believes is sufficient to fund operations for the next 12 months[196](index=196&type=chunk)[197](index=197&type=chunk) - Net cash used in operating activities decreased to **$4.4 million in 2024** from **$6.5 million in 2023**[199](index=199&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, DatChat is not required to provide this information - The company is not required to provide this information as it qualifies as a smaller reporting company[208](index=208&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section references the consolidated financial statements and related notes, which are included at the end of the Form 10-K report, starting from page F-1 - The company's audited financial statements are located in pages **F-1 through F-22** of the report[209](index=209&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=40&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[210](index=210&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that as of December 31, 2024, the company's disclosure controls and procedures and its internal control over financial reporting were not effective due to identified material weaknesses - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024[211](index=211&type=chunk) - Internal control over financial reporting was also deemed not effective due to material weaknesses[213](index=213&type=chunk) - Identified material weaknesses include: lack of segregation of duties, insufficient levels of management review, and inadequate system/manual controls, primarily due to limited personnel[214](index=214&type=chunk)[219](index=219&type=chunk) [Other Information](index=41&type=section&id=Item%209B.%20Other%20Information) During the last fiscal quarter, no directors or executive officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement in the fourth quarter of 2024[217](index=217&type=chunk) [Part III](index=42&type=section&id=Part%20III) [Directors, Executive Officers and Corporate Governance](index=42&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides biographical information for the company's executive officers and directors, detailing the composition of the Board's committees and the adoption of a code of business conduct and an insider trading policy - The executive team includes **Darin Myman (CEO)**, **Peter Shelus (CTO)**, and **Brett Blumberg (CFO)**[222](index=222&type=chunk) - The Board has three independent directors: Wayne D. Linsley, Joseph Nelson, and Carly Luogameno, who comprise the entirety of the Audit, Compensation, and Nominating and Corporate Governance committees[234](index=234&type=chunk)[235](index=235&type=chunk)[236](index=236&type=chunk) - The company has adopted a formal code of business conduct and ethics and an insider trading policy[237](index=237&type=chunk)[238](index=238&type=chunk) [Executive Compensation](index=45&type=section&id=Item%2011.%20Executive%20Compensation) For fiscal year 2024, CEO Darin Myman's total compensation was $750,000, with details on other executive salaries and employment agreements provided Named Executive Officer Compensation (2024) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | | Darin Myman, CEO | 2024 | 450,000 | 300,000 | 750,000 | | Brett Blumberg, CFO | 2024 | 60,000 | - | 60,000 | | Peter Shelus, CTO | 2024 | 275,000 | - | 275,000 | - CEO Darin Myman's employment agreement provides for a **$450,000 base salary** and a potential annual bonus up to **$350,000**, including severance benefits equal to 24 months of base salary upon certain termination events[248](index=248&type=chunk) - CFO Brett Blumberg's employment agreement provides for an annual base salary of **$60,000**[249](index=249&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=48&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of March 26, 2025, CEO Darin Myman beneficially owned 4.65% of the company's common stock, with all directors and named executive officers as a group owning 7.64% Security Ownership of Management (as of March 26, 2025) | Name | Shares | Percentage | | :--- | :--- | :--- | | Darin Myman (CEO) | 200,000 | 4.65% | | Peter Shelus (CTO) | 100,000 | 2.34% | | All Directors & NEOs as a group (6 persons) | 327,500 | 7.64% | - As of December 31, 2024, there were **485,430 securities** remaining available for future issuance under the company's equity compensation plans[254](index=254&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=49&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company disclosed a related party transaction involving VR Interactive LLC, an entity partially owned by the CEO and CTO, and confirmed the independence of three Board members - On January 10, 2024, VR Interactive LLC, an entity partially owned by the CEO and CTO, purchased **8,000,000 shares** of subsidiary RPM Interactive for **$120,000**, becoming a 25% non-controlling interest holder[258](index=258&type=chunk)[309](index=309&type=chunk) - The Board of Directors has determined that Wayne D. Linsley, Carly Luogameno, and Joseph Nelson are independent directors[262](index=262&type=chunk) [Principal Accountant Fees and Services](index=50&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The company paid its principal accountant, Salberg & Company, P.A., total fees of $102,100 in fiscal year 2024, primarily for audit services, all pre-approved by the audit committee Accountant Fees | Fee Type | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Audit Fees | 91,200 | 78,600 | | Audit Related Fees | 10,900 | – | | Tax Fees | – | – | | All Other Fees | – | – | | **Total** | **102,100** | **78,600** | - All audit and non-audit services provided by the independent registered public accounting firm were pre-approved by the audit committee[266](index=266&type=chunk) [Part IV](index=51&type=section&id=Part%20IV) [Exhibits and Financial Statement Schedules](index=51&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the 10-K report, including references to the consolidated financial statements and notes on omitted schedules - This section provides an index of the financial statements and a list of all exhibits filed with the 10-K report[269](index=269&type=chunk)[273](index=273&type=chunk) [Form 10-K Summary](index=52&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[275](index=275&type=chunk)

Core Points - DatChat, Inc. has launched its Myseum Social Media Platform for storing and sharing digital photos, now available for download on Apple iOS and Android devices [1][2] - The company will sponsor and participate in The Photo Managers Conference 2025, scheduled for April 22-26 in San Diego, California [1][3] Company Overview - DatChat, Inc. is a secure messaging and social media company that emphasizes user privacy and control over shared information [5] - The Myseum platform allows users to create a digital legacy, enabling secure storage and sharing of messages, photos, videos, and documents within a private family library [2][5] - The company’s technology includes features that allow users to control message visibility duration and prevent screenshots, enhancing user security [5] Industry Context - The Photo Managers, founded in 2009, is a leader in training professionals to help individuals and families organize, preserve, and share memories [4] - The upcoming conference provides a platform for DatChat to showcase Myseum to a targeted audience of photo professionals and potential users [3][4]